The real estate market is volatile. You never know when interest rates will suddenly increase or decrease, but forecasters can utilize several factors to determine overall trends in mortgage loan interest rates for the coming year.

You might not think that it makes sense to refinance your home when rates are rising, but that isn't necessarily true. A refinance could benefit you in a number of ways -- even with a real estate market that has rising rates.

1. Refinance to a loan with a shorter term.

Many mortgages come with a 30-year repayment term. While these mortgages might have provided the best rates when you initially purchased your home, you can save a significant amount of money by opting to refinance to a loan with a shorter term.

Even if the interest rates during your refinance period are slightly higher than the rate associated with your original loan, the shorter repayment term means that you will spend less on interest in the long-run.

A mortgage loan with a shorter repayment term can also help you build equity in your home faster. This equity could prove valuable if you want to take out a home equity loan or refinance your mortgage again when rates decrease in the future.

2. Take advantage of an adjustable-rate mortgage.

Buyers are often wary of securing an adjustable-rate mortgage (ARM) because they are worried the interest rate will skyrocket once the fixed-rate term has expired. While an ARM might not make sense for everyone, it can be beneficial to refinance to an ARM in a market with rising interest rates.

The interest percentages during the fixed-rate period of an ARM tend to be lower than the rates for a traditional mortgage. If you are planning on moving out of your current home before the fixed-rate period expires, then refinancing to an ARM could save you quite a bit of money.

3. Leverage your home's rising value.

When interest rates rise, property values can also increase. Your home might be worth more now than it was when you took out the initial mortgage. Refinancing can allow you to leverage the equity you have built in your home to make improvements that will bolster equity even further.

A cash-out refinance gives you access to funds that you can utilize to remodel your kitchen, add a garage to your property, or upgrade your landscape. As long as you use the money to reinvest in your home, refinancing when interest rates are higher won't have a negative long-term effect on your property value.

For more information, contact home refinancing services in your area today.